The attached report highlights the Corporation's financial activities
and results for the period ending June 30, 2008.

The Deposit Insurance Fund (DIF) balance decreased by 14 percent
($7.626 billion) to $45.217 billion during the second quarter of
2008. The second quarter 2008 decrease was primarily due to the $10.0
billion
increase in the contingent liability for anticipated failures,
the majority of this amount pertained to the projected loss for IndyMac
Bank.

All of the DIF investment
portfolio’s held-to-maturity
(HTM) securities were reclassified as available-for-sale (AFS)
securities effective as of June 30, 2008, as it was determined
that in light
of significant actual and potential resolution-related outlays,
the FDIC could no longer assert that it had the positive intent
and ability to hold its HTM securities until their maturity dates,
as required by generally accepted accounting principles. The
reclassification resulted in an increase in unrealized gains on
AFS securities of
$1.630 billion.

On May 9,
2008, ANB Financial, National Association, Bentonville, Arkansas,
was closed
by the Office of the Comptroller of the Currency
and the FDIC was named receiver. Of the $2.011 billion in total
assets at inception, Pulaski Bank and Trust Company, Little Rock,
Arkansas, purchased $229 million, while the FDIC retained $1.782
billion in assets,
comprised primarily of commercial real estate loans. DIF recorded
a $1.546 billion net receivable from the ANB Financial receivership,
representing
an estimated $1.760 billion in subrogated claims, less an allowance
for loss of $214 million.

On May 30, 2008, the Office of the Comptroller of the Currency
closed First Integrity Bank, National Association, Staples, Minnesota,
and named the FDIC as receiver. First International Bank and Trust, Watford
City, North Dakota, assumed all of the $49.7 million in deposits of the
failed institution and purchased $34.9 million of the $51.8 million in
assets. DIF recorded a $47.4 million net receivable from the First Integrity
Bank receivership, representing $49.7 million in subrogated claims, less
an allowance for loss of $2.3 million.

For the six months
ending June 30, 2008, expenditures related to the Corporate Operating
and Investment Budgets ran below budget 5
percent and 2 percent, respectively. The variance with respect
to the Corporate Operating Budget expenditures was primarily the result
of lower
spending for contractual services in both the Ongoing Operations
and Receivership Funding components of the budget through the second
quarter.
Detailed quarterly reports are provided separately to the Board
by the Capital Investment Review Committee (CIRC).

On
the pages following is an assessment of each of the three major finance
areas:
financial statements, investments, and budget.